Professional Documents
Culture Documents
Who is a person?
FEMA defines [Sec.2(u)] Person as
Person includes an individual, HUF,
a company, a firm, an association of
persons, body of individuals whether
incorporated or not, every artificial,
judicial person and any
agency/office/branch controlled by
such person
NRI
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8.
Features of NRO
Accounts
Any person resident outside India is permitted to open accounts
(including foreign national of non-Indian origin)
Individuals/Entities of Bangladesh/Pakistan nationality/ownership
require approval of RBI
The account is maintained in rupees
Source of funds: existing a/c can be re-designated; inward
remittance/TC/FC, transfer from NRE/FCNR
All types of deposit accounts (SB,CA, TD, RD) can be opened
Jointly with another NRI or resident
Deposits can be accepted for periods in line with domestic
deposits ( 7 days to 10 years)
The balance in the account is repatriable only to the extent
permitted by RBI; ADs permitted to repatriate up to USD 1
million during a financial year
Features of NRO
Accounts
9. Interest on NRO term deposit and NRO (SB) account is freely
repatriable
10. Can credit all local income (like rent, dividend, interest, sale
proceeds of investment/assets, foreign inward remittance in
account holders name)
11. Interest earned on NRO deposits is subject to Indian Income
Tax subject to DTAA but exempt from wealth tax/gift tax
12. Nomination facility available
13. Premature closure permitted subject to usual conditions
14. Loans against deposits available to self and third parties
15. To be re-designated as resident account on return from abroad
16. International Credit Cards can be issued
Rupee Accounts:
1) Non resident Ordinary account: NRO
-Opened by N R I for domestic expenses.
2)Whenever an Indian leaves the Country for taking up employment abroad his
account will be classified as NRO
NRE account
PA holder can operate NRE account for local payments ,
permitted investments, permitted outward remittance
(to the NRI only)
Debits to the Account:
-Towards Local Payments
- For repatriation to the NRIs,
-For transfer to NRE/FCNR accounts
-For Investments in ,movable/immovable assets etc.
-For any transactions permitted by the RBI,
Temporary Overdrawings
Allowed for a period not exceeding
two weeks up to a limit of Rs. 50000
To be repaid out of inward
remittances/transfer from other NRE,
FCNR accounts
Change of Status
NRO Accounts & NRE Accounts
-May be re-designated as resident accounts once
the account holder returns to the country, with an
intention to settle permanently,
-If he is on short visit , the account will be treated
as NRE only,
NRE balances -May be transferred to RFC account
Opened by NRIs,
Singly/Jointly with a non=resident/resident close relative on
F or S basis
Nomination facility resident/non-resident
The currency will be any permitted Foreign (freely
convertible) currency -earlier US $, GBP, EURO, JPY, CAD
and AUD
The nature of accounts will be Fixed Deposits for different
periods - Minimum 1 year and above and maximum up to 5
years
Freely repatriable
Source of funds inward remittance or from balance of
freely convertible rupee account (in NRE account)
Inward remittance in rupees for issue of FCNR TT selling
rate applicable
Loans against deposit to self and third parties in rupees
as well as foreign currencies to be liquidated by funds
from abroad only
FCNR
Interest : LIBOR/Euribor related - RBI ceiling
-will be paid in Foreign Currencies at the agreed
rates;
fully exempt from income tax
Payment of Interest: on 360 days basis
- For deposits up to one year : No compounding
- For deposits above one year: Half yearly
Compounding
Pre-mature closure - Yes
Forward cover available
Can be opened by NRI who return to India for permanent settlement and thus
become resident in India
Resident in India can open an account in Foreign Currency out of Forex received
from:
-Pension received ,
-Monetary benefit on account of retirement benefits,
-Conversion of the assets held abroad while he was resident abroad & repatriated to
India,
Utilisation : No restrictions
Types of Accounts:
-Current/ Savings/Term Deposits
A resident can open the account with the Foreign Currency received by him in
the following situations:
-payment received for services rendered outside India, while on visit outside
the Country,
-honorarium or gift received from a person not resident in India, or settlement
of lawful obligations,
- honorarium or gift received from a non resident person while on visit abroad,
-Currency received for travel abroad but not spent,
EEFC Account
Exchange Earners Foreign Currency Account
Up to 50% of inward remittances
Held in any permitted foreign currency
Singly/Jointly (NRIs/RI & R F or S basis
Maintained as current account
Cheque Book
Can be used for payments outside India (for current
account and permitted capital account transactions)
Amount withdrawn as rupee cannot be reconverted to
FC and re-credited to EEFC account
Foreign Currency
Accounts Abroad
Opened by a foreign national resident
in India/ Indian citizen employed by
a foreign company outside India/in
either case posted outside India can
maintain a FC account with a bank
outside India
Salary 75% in FC, 25% in rupees
subject to Indian Income Tax for
full salary
Investment not
permitted